IAF's IL-76 on standby to evacuate Indians from Russia

The Indian Air Force (IAF) has kept two IL-76 military transport aircraft on standby to evacuate Indians who are stranded in conflict-hit eastern Ukrainian cities like Sumy and Kharkiv from Russian capital Moscow, officials said on Friday, March 4.

As the Indians stranded in eastern Ukrainian cities, where the fighting is the heaviest, cannot move to the western border of Ukraine, the IAF is planning to evacuate them from Moscow with the help of Russian military forces, the officials noted.

Till now, India has been evacuating its citizens from Ukraine's western neighbours such as Romania, Slovakia, Poland and Hungary as the Ukrainian airspace has remained shut since February 24, when the Russian military offensive began.

The Indian Air Force (IAF) has kept two IL-76 military transport aircraft on standby to evacuate Indians who are stranded in conflict-hit eastern Ukrainian cities

Two IL-76 aircraft -- which are of Russian origin -- have been kept on standby so that they can immediately depart for Moscow and evacuate Indians, the officials added.

Till date, the IAF has evacuated a total of 1,428 Indians on seven flights from Ukraine's western neighbouring countries. These seven flights were operated through US-origin C-17 planes.

The IAF has readied its fleet of C-17 transport aircraft for Operation Ganga. The American C-17 Globemasters and IL-76 transport aircraft are the most capable of flying to long distances with around 400 passengers. The C-17 transport aircraft had helped in a big way to evacuate citizens and officials from Kabul when the Taliban captured Afghanistan and forced Americans to exit from there.

These seven flights were operated through US-origin C-17 planes.

India on Thursday, March 3 said it was primarily focusing on the evacuation of its nationals from the besieged city of Kharkiv and other conflict zones in eastern Ukraine amid increasing Russian military offensive in the region.

At a media briefing, external affairs ministry spokesperson Arindam Bagchi said around 1,000 Indians reached Pisochyn from Kharkiv following the urgent advisory issued by the Indian embassy in Ukraine on Wednesday, March 2.

"We estimate that a few hundred people still remain in Kharkiv despite our advisory," Bagchi said, adding that "unfortunately" there has been a fresh outbreak of violence in the city on Thursday, March 3.

Domestic flights will soon start operating from Uttarlai Air Force Station in Barmer near the Pakistan border, a senior official said on Friday, March 4.

Ministry of Defence has granted sanction to the Airport Authority of India (AAI) to operate air services from the runway of the Uttarlai Air Force Station, Defence Estate Officer Abhinav Singh said.

After Jodhpur Air Force Station, this will be the second airbase in Western Sector to allow the operation of civil domestic flights from its runway. The airbase played an important role in the Indo-Pakistan war.

AAI to begin domestic flight operations from Uttarlai Airbase near Pakistan border

The squadron of upgraded MiG-21 Bison is deployed here. Defence Estate Officer Singh said that land measuring 4,568 sqm would be given to the AAI on the annual lease of INR 10,670 in the air force station as per the Memorandum of Understanding to be signed between the IAF and AAI.

"Besides this land, a parcel of 7.1 bighas between the adjacent railway line and air force station has already been allotted to the AAI for construction of a terminal for the airport," said Singh.

The permission is in pursuance of the regional connectivity scheme 'UDAN' introduced by Prime Minister Narendra Modi in April 2017 to expand air services in the country and make them economic.

Uttarlai airbase played an important role in the Indo-Pakistan war.

The AAI had expressed its intention to operate civil flights from Uttarlai Air Force Station in 2018 keeping in view the growing importance of Barmer as a centre for crude production and its refining and generation of non-conventional energy.

While construction of the refinery and crude exploration by the oil exploration giant Cairn Energy is already in full swing in Barmer, many other companies are engaged in minerals, oil and gas exploration and solar and wind energy generation.

The Estate officer said that the sanction has been granted to the AAI for construction of temporary/minimum infrastructure on and near the defence land at/inside perimeter wall and between the railway line and air force station boundary wall without alienation/transfer of ownership of land.

The Ukraine-Russia conflict is expected to hit supply chains and reduce cargo capacity at a time when air transport supply is still struggling to catch up from pandemic-related cutbacks.

The increased flight duration and longer routes would also result in higher cargo rates and could also disrupt global supply chains, as airlines would be incurring higher costs at a time when jet fuel prices are already touching all-time highs.

The Ukraine-Russia conflict is expected to hit supply chains and reduce cargo capacity at a time when air transport supply is still struggling to catch up from pandemic-related cutbacks.

Many American and European airlines including Deutsche Lufthansa AG, Virgin Atlantic and Finnair and among others have announced they will cancel cargo services to Hong Kong and Beijing.

FedEx Corp, one of the world’s largest logistics companies, has also said that deliveries between the US, Europe and East Asia will be delayed by two to three days due to the closure of the Russian and Ukrainian airspace.

Air cargo experts say that air cargo rates between the US, Europe and East Asia can rise by around 30-50% by the end of March when compared to February.

Air cargo experts say that air cargo rates between the US, Europe and East Asia can rise by around 30-50% by the end of March when compared to February.

The consumer durables, automobile and electronics industry in Europe and parts of Asia are also expected to be hit due to disruption of global chains, especially for critical parts.

Many European consumer durables, automobile and electronics companies import semi-conductors, a critical part of these industries, from East Asian countries like China, Japan and South Korea.

(With Inputs from MoneyControl)

The domestic aviation industry is expected to report a net loss of INR 25,000-26,000 crore this fiscal with elevated jet fuel prices and fare caps continuing to pose a major challenge for the airlines' profitability, domestic rating agency ICRA Ltd said on March 3.

The domestic airlines, however, are likely to post a reduced net loss of INR 14,000-16,000 crore in the next financial year on the back of a "notable recovery" in air passenger traffic and a lower level of debt, ICRA said.

The domestic aviation industry is expected to report a net loss of INR 26,000 crore this fiscal

The rating agency also estimates that the industry will require additional funding in the range of INR 20,000-22,000 crore during FY22-24. ICRA said it expects domestic air passenger traffic to witness a strong Y-o-Y growth of 50-55% in 2021-22 supported by the fast pace of vaccination and gradual relaxations in restrictions by the regulatory authorities.

However, this recovery will be on a much lower base of FY2021, it said. It added that this will be significantly lower than the pre-COVID-19 levels, given that the recovery to pre-COVID-19 levels is expected by FY2024.

"With the onset of the second wave of the pandemic and the later emergence of the Omicron variant, the recovery in passenger traffic remained gradual in the current fiscal. Further, elevated aviation turbine fuel (ATF) prices, (which were 68% higher year-on-year basis in 11 months of the ongoing fiscal FY2022) and continued fare caps continue to pose a major challenge for the profitability of the airlines."Suprio Banerjee, Vice-President and Sector Head, ICRA Ltd

Therefore, the Indian aviation industry is expected to report "a net loss of INR 250-260 billion (INR 25,000 - INR 26,000 crore) in FY2022," as per earlier estimates of ICRA, he said. However, the expected commencement of scheduled international operations and the waning Omicron wave will result in a notable recovery in passenger traffic in FY2023, said Banerjee.

Domestic airlines are likely to post a reduced net loss of INR 14,000-16,000 crore

"Coupled with lower debt levels, estimated to reduce to around INR 1,000 billion (including lease liabilities) in FY2022 driven by a notable reduction in debt levels in Air India Ltd before the stake sale, the net losses are likely to reduce to around Rs 140-160 billion in FY2023," he said.

This is even though airlines will have to pay much higher fuel bills in FY2023, owing to a sharp rise in crude oil prices amid rising geopolitical development surrounding the Russia-Ukraine conflict, Banerjee added.

While debt reduction in FY2022 is largely driven by a notable reduction in the debt level in Air India Ltd before its stake sale, ICRA said it continues to maintain its negative credit outlook on the Indian aviation industry. This is given the elevated ATF prices, the overhang of the recent COVID-19 wave and continued suspension of scheduled international travel.

This is given the elevated ATF prices, the overhang of the recent COVID-19 wave

The recovery in domestic air passenger traffic is expected to be supported by pent-up demand in the leisure travel segment and gradual recovery in business travel as corporate offices move towards the resumption phase, after the third wave, ICRA said.

The impact of the pandemic has been more profound and long-lasting on international travel, compared to domestic travel, with scheduled international operations still under suspension, it stated.

In the near term, the balance sheets of Indian carriers will remain stressed until the carriers can reduce their debt burden through a combination of improvement in operating performance and/or through equity infusion, according to the rating agency.

Going ahead with their plans of restarting operations by summer months, Jet Airways has chosen Sanjiv Kapoor, who has headed revenue and strategy departments at SpiceJet and Vistara, to lead the new Jet Airways.

The airline company announced that Sanjiv Kapoor will be the CEO of the company and will join on April 4, 2022.

“I am certain he (Sanjiv) will be able to lead Jet Airways and make it become the most preferred full-service carrier of India. Sanjiv is a seasoned aviation professional who has the right blend and demeanour to stitch a team together."Murari Lal Jalan, Lead Partner, Jalan-Kalrock Consortium and Proposed Non-Executive Chairman, Jet Airways

Kapoor, who has been the Chief Operating Officer at SpiceJet and Chief Strategy and Commercial Officer at Vistara, resigned as president of Oberoi Hotels on Thursday, March 3.

Jet Airways, which is now promoted by the Jalan Kalrock consortium, had plans to restart operations during the first quarter of 2022 – that seems unlikely and the airline may begin operations by the summer months.

Jet Airways already has about 150 employees on its rolls and the airline is also speaking to vendors, including lessors, for the relaunch.

Kapoor would be the second top-level announcement at Jet Airways – the airline recently hired P P Singh as the accountable manager. Singh used to work with Jet Airways earlier and headed JetLite, a subsidiary of Jet Airways.

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His appointment to the post also comes days after the airline brought in former Sri Lankan Airlines CEO Vipula Gunatileka as the chief financial officer.

Accepting his role as Jet Airways CEO, Kapoor said, even though the airline has been out of operation for three years, it still has a large fan base of loyal customers who miss it every day and can’t wait for it to take to the skies again.

“Working together with a very strong team of experienced aviation professionals that is being put together by the Jalan-Kalrock Consortium, I look forward to leading the charge in rebuilding Jet Airways into the most preferred customer-oriented airline once again, a people-focused airline for the digital age.”Sanjiv Kapoor, CEO, Jet Airways

Jet Airways already has about 150 employees on its rolls and the airline is also speaking to vendors, including lessors, for the relaunch.

ALSO READ - Jet Airways seeks debt settlement before resuming scheduled flights in early 2022

Jet stopped operating in April 2019, burdened under piling losses, debt and dues. It was admitted for insolvency proceedings by the National Company Law Tribunal in June 2019. After two years of a rambling insolvency process, the bankruptcy court approved JKC’s resolution plan in June 2021.

Jet Airways’ flying licence or AOP was made dormant, months after it stopped flying in April 2019 and the airline is in the process of renewing it.

Jet Airways may begin operations in the upcoming summer months.

Kapoor, a Wharton MBA, started his airline career with Northwest Airlines (now merged with Delta) in the US in 1997, where he worked in finance and corporate planning.

Kapoor, who had joined SpiceJet from Bangladesh-based GMG Airlines in November 2013, helmed the airline at a time of record-high oil prices and still helped reduction in losses by half and reach 23% market share before the cash crunch resulted in a severe crisis and eventual change of ownership.

At Vistara, Kapoor was responsible for strategy, network, marketing, product development and all other commercial functions, as well as key operating departments such as cabin services, ground services, and the operational control centre, was part of the airline’s growth from 9 to 45 aircraft.

Flag carrier Garuda Indonesia is negotiating the terms of its aircraft deals with manufacturers Airbus SE and Boeing, with the cancellation of the orders among the options, its chief executive officer told Reuters on Tuesday, March 1.

The step was taken based on consideration of the airline's short-term demand, CEO Irfan Setiaputra said.

Garuda's earnings have been hard hit by the pandemic, which forced the company to launch a major restructuring seeking to slash its debt to USD 3.7 billion from USD 9.8 billion.

While 737 MAXs might be a better fit for a domestic and intra-Asia regional operator than wide-bodied planes

"Hopefully we can get a win-win solution," Irfan said of the negotiations with the manufacturers.

Garuda is undergoing debt restructuring proceedings, known locally as PKPU after a vendor petitioned a Jakarta court over unpaid liabilities. Garuda has proposed converting part of its debt to equity, offering a debt haircut and a new coupon debt. 

With Airbus, Garuda has outstanding orders for nine A330-900 jets and four A330-800s. Garuda has previously said it would cancel the remaining orders of Boeing 737 Max 8 following fatal crashes of the aircraft in Ethiopia and Indonesia.

Garuda Indonesia is negotiating the terms of its aircraft deals with manufacturers Airbus and Boeing, with the cancellation of the orders among the options

While 737 MAXs might be a better fit for a domestic and intra-Asia regional operator than wide-bodied planes, the USD 4.9 billion bills for the 50 MAX 8s on order and the 2018 Lion Air MAX crash just offshore from Jakarta has dampened enthusiasm for the plane at Garuda. The airline has taken delivery of one of the MAXs but wants to cancel the remaining 49.

Garuda also has an order with Airbus for 25 A320neo aircraft destined to fly for its low-cost subsidiary Citilink. Current reports indicate Garuda wants to keep that order in place. Irfan Setiaputra has previously stated he sees a restructured Garuda adopting a Citilink style operating model. There is no word on whether Garuda is trying to renegotiate terms on this order.

Garuda wants lessors to provide reduced rates and power-by-the-hour contracts for the planes it wants to keep.

The airline has said it would return more planes as it seeks to scale down its fleet to 66 from 142 before the pandemic.

According to the airline database ch-aviation.com, Garuda's current fleet consists of 117 planes, 99 of which are leased. According to the same database, Garuda presently has 30 lessors with aircraft. Garuda wants lessors to provide reduced rates and power-by-the-hour contracts for the planes it wants to keep.

Garuda aims to settle its existing debts with all lessors by issuing Islamic bonds. The ability to persuade the various lessors to accept this contract is critical to the restructuring process.